Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 1 of 20 Page ID #:2534
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`
`JEAN-PAUL CIARDULLO, CA Bar No. 284170
` jciardullo@foley.com
`FOLEY & LARDNER LLP
`555 South Flower Street, Suite 3300
`Los Angeles, CA 90071
`Telephone: 213-972-4500
`Facsimile: 213-486-0065
`
`ELEY O. THOMPSON (pro hac vice)
` ethompson@foley.com
`FOLEY & LARDNER LLP
`321 N. Clark Street, Suite 2800
`Chicago, IL 60654-5313
`Telephone: 312-832-4359
`Facsimile: 312-83204700
`
`RUBEN J. RODRIGUES (pro hac vice)
`rrodrigues@foley.com
`LUCAS I. SILVA (pro hac vice)
`lsilva@foley.com
`JOHN W. CUSTER (pro hac vice)
`jcuster@foley.com
`FOLEY & LARDNER LLP
`111 Huntington Avenue, Suite 2500
`Boston, MA 02199-7610
`Telephone: (617) 342-4000
`Facsimile: (617) 342-4001
`
`Attorneys for Plaintiff
`Philips North America LLC
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`WESTERN DIVISION
` Case No. 2:19-cv-06301-AB-KS
`PHILIPS NORTH AMERICA LLC’s
`OPPOSITION TO DEFENDANTS’
`MOTION TO AMEND; MOTION TO
`DISMISS IN THE ALTERNATIVE
`
`
`
`Philips North America LLC,
`
`
`
`
`Plaintiff,
`
`
`vs.
`
`
`Garmin International, Inc. and
`Garmin Ltd.,
`
`
`
`
`
`
`Defendants.
`
`August 28, 2020
`Date:
`10:00 A.M.
`Time:
`Courtroom: 7B
`
`Hon. André Birotte Jr.
`
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 2 of 20 Page ID #:2535
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`I. 
`II. 
`
`V. 
`
`TABLE OF CONTENTS
`INTRODUCTION .................................................................................................. 1 
`APPLICABLE LAW .............................................................................................. 2 
`A. 
`Futility Of Amendment ................................................................................ 2 
`B. 
`The Strict Inequitable Conduct Standard Under Therasense ....................... 2 
`C. 
`The Inequitable Conduct Pleading Standard Under Exergen ...................... 3 
`III.  THERE IS NO PLAUSIBLE PLEADING UNDER EXERGEN THAT THE
`ATTORNEYS PROSECUTING THE ’192 PATENT WERE AWARE OF
`YAMAMOTO, MUCH LESS THAT THEY BELIEVED IT WAS
`MATERIAL AND WITHHELD IT ....................................................................... 4 
`A.  Garmin’s Proposed Pleading Is Speculation Improperly Couched As
`Fact ............................................................................................................... 4 
`The Relevant US Attorneys Were Not Involved In The EU
`Prosecution ................................................................................................... 6 
`A Simple Timeline Shows The Disconnect Between Events In The
`EU And The US ........................................................................................... 8 
`The Citation Of The Japanese Reference Does Not Plausibly Suggest
`Knowledge Of Yamamoto ......................................................................... 10 
`IV.  THE LAW COMPELS DENIAL OF GARMIN’S MOTION AS FUTILE ........ 11 
`A. 
`Exergen And Its Progeny Are Directly On Point ....................................... 11 
`B. 
`The ITC Recently Granted Philips’s Request To Strike An Even More
`Elaborate Pleading ...................................................................................... 13 
`The Court Should Not Indulge Garmin’s Tactical Maneuvering To
`Create A Wasteful Sideshow ...................................................................... 14 
`IN THE ALTERNATIVE, THE COURT SHOULD DISMISS THE
`PLEADINGS FOR FAILURE TO STATE A CLAIM ........................................ 15 
`VI.  CONCLUSION ..................................................................................................... 15 
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`B. 
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`C. 
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`D. 
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`C. 
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 3 of 20 Page ID #:2536
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`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Federal Cases
`In re Autodesk, Inc. Sec. Litig.,
`132 F. Supp. 2d 833 (N.D. Cal. 2000) ............................................................................ 6
`BlackBerry Ltd. v. Typo Prods LLC,
`14-cv-00023-WHO (N.D. Cal. May 8, 2014) ............................................................... 12
`Burlington Coat Factory Sec. Litig.,
`114 F.3d at 1418 (Alito, J.) ........................................................................................... 12
`Certain Wearable Monitoring Devices, Systems, and Components Thereof,
`ITC Investigation No. 337-TA-1190 ............................................................................ 13
`Davis v. Lost Int’l LLC,
`No. CV 12-8002 GAF, 2013 U.S. Dist. LEXIS 199179 (C.D. Cal. Apr. 8,
`2013) ............................................................................................................................... 7
`Exergen Corp. v. Wal-Mart Stores, Inc.,
`575 F.3d 1312 (Fed. Cir. 2009) .................................................................. 2, 3, 4, 11, 12
`Foman v. Davis,
`371 U.S. 178 (1962) ........................................................................................................ 2
`Idearc Media, LLC v. Palmisano & Assocs., P.C.,
`No. CV 09-2147-PHX-JAT, 2012 U.S. Dist. LEXIS 52052 (D. Ariz. Apr.
`12, 2012) ....................................................................................................................... 14
`Miller v. Rykoff-Sexton, Inc.,
`845 F.2d 209 (9th Cir. 1988) .......................................................................................... 2
`Swartz v. KPMG LLP,
`476 F.3d 756 (9th Cir. 2007) .......................................................................................... 6
`Therasense, Inc. v. Becton, Dickinson & Co.,
`649 F.3d 1276 (Fed. Cir. 2011) .................................................................................. 2, 3
`Waddington N. Am., Inc. v. Sabert Corp.,
`No. 09-4883 (GEB), 2010 WL 3908036 (D. N.J. Jan. 4, 2016) ................................... 12
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 4 of 20 Page ID #:2537
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`
`Rules
`Fed. R. Civ. P. 9(b) ............................................................................................ 3, 12, 13, 15
`Fed. R. Civ. P. 12(b)(6) ........................................................................................ 2, 6, 14, 15
`Fed. R. Civ. P. 15 ..................................................................................................... 3, 14, 15
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 5 of 20 Page ID #:2538
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`I.
`
`INTRODUCTION
`Plaintiff Philips North America, LLC (“Philips”) hereby respectfully opposes
`Defendants Garmin International, Inc.’s and Garmin Ltd.’s (collectively “Garmin”) Motion
`to Amend their Counterclaims to add allegations of inequitable conduct with respect to
`U.S. Patent No. 9,314,192 (“’192 Patent”) on the grounds that such amendment would be
`futile, and that Garmin is improperly seeking to derail and multiply these proceedings.
`Significantly, although not acknowledged by Garmin, the International Trade Commission
`just recently granted Philips’s Motion to Strike very similar inequitable conduct allegations
`in a co-pending proceeding between the parties. (See Ruling at Exhibit 1 to the
`accompanying Declaration of Jean-Paul Ciardullo.)
`Garmin’s proposed counterclaim rests on the premise that the Philips attorneys
`prosecuting the ’192 Patent application in the US were aware of purportedly material prior
`art – the Yamamoto reference – that had been cited in a European patent application
`claiming similar priority. However, as is apparent on the face of the US and EU application
`file histories that Garmin’s pleadings rely upon, none of the same attorneys handing the
`US case were ever involved in the EU case, and indeed they are from different continents.
`The only linkage Garmin draws between the separate US and EU patent prosecutors is the
`fact that they all work for Philips, and they use the same automated docket numbering
`format (even though the record establishes that there were separate file names and separate
`files in the US and EU). As is proved up by the proposed pleadings themselves, the Philips
`Intellectual Property & Standards (IP&S) group has hundreds of professionals working in
`dozens of offices prosecuting more than a thousand patent applications per year, such that
`imputing specific knowledge across the organization is not plausible on its face.
`Furthermore, the Yamamoto reference was cited in the EU a full six years after the ’192
`Patent application had already been filed and was nearing the end of prosecution.
`The law is clear that “[t]he mere fact that an applicant disclosed a reference during
`prosecution of one application, but did not disclose it during prosecution of a related
`application, is insufficient to meet the threshold level of deceptive intent required to
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 6 of 20 Page ID #:2539
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`support an allegation of inequitable conduct.” Exergen Corp. v. Wal-Mart Stores, Inc., 575
`F.3d 1312, 1331 (Fed. Cir. 2009). Here, Garmin cannot even plausibly allege that the US
`attorneys in question knew of the Yamamoto reference, much less believed it was material
`and deliberately withheld it with intent to deceive. If Garmin wishes to try to argue that
`the ’192 Patent is invalid in view of Yamamoto, it can attempt to do so without invoking a
`trumped-up claim of inequitable conduct, which is a cause of action the Federal Circuit has
`aptly called the “plague” of the patent system.
`In the alternative, should the Court not preclude amendment, Philips simultaneously
`requests that any amended pleading be dismissed under Fed. R. Civ. P. 12(b)(6).
`II. APPLICABLE LAW
`A.
`Futility Of Amendment
`Under Rule 15(a) of the Federal Rules of Civil Procedure, “leave to amend shall be freely
`given when justice so requires,” at least “in the absence of…undue delay, bad faith[,] dilatory
`motive on the part of the movant, …undue prejudice to the opposing party…, futility of
`amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks
`omitted). An amendment is futile when “no set of facts can be proved under the amendment to
`the pleadings that would constitute a valid and sufficient claim or defense.” Miller v. Rykoff-
`Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988).
`B.
`The Strict Inequitable Conduct Standard Under Therasense
`In the landmark case Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290
`(Fed. Cir. 2011), the Federal Circuit held that in order to prove inequitable conduct “the accused
`infringer must prove by clear and convincing evidence that the applicant knew of the reference,
`knew that it was material, and made a deliberate decision to withhold it.” The Therasense court
`explained its rationale as follows:
`…the remedy for inequitable conduct is the ‘atomic bomb’ of patent
`law. … ‘The habit of charging inequitable conduct in almost every
`major patent case has become an absolute plague. Reputable lawyers
`seem to feel compelled to make the charge against other reputable
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`lawyers on the slenderest grounds, to represent their client's interests
`adequately, perhaps.’ [] Left unfettered, the inequitable conduct
`doctrine has plagued not only the courts but also the entire patent
`system. Because allegations of inequitable conduct are routinely
`brought on ‘the slenderest grounds,’ [] patent prosecutors constantly
`confront the specter of inequitable conduct charges. …While honesty
`at the PTO is essential, low standards for intent and materiality have
`inadvertently led to many unintended consequences, among them,
`increased adjudication cost and complexity, reduced likelihood of
`settlement, burdened courts, strained PTO resources, increased PTO
`backlog, and impaired patent quality. This court now tightens the
`standards for finding both intent and materiality in order to redirect a
`doctrine that has been overused to the detriment of the public.
`Therasense, 649 F.3d 1288-90 (citations omitted).
`Notably, the Therasense court also observed (id., at 1302) that “to the extent there are
`concerns with litigation abuses surrounding the improper use of this otherwise important
`doctrine, there are vehicles available to the district court to address those concerns [including]
`[c]areful application of the pleading requirements set forth in Exergen Corp. v. Wal-Mart Stores,
`Inc., 575 F.3d 1312 (Fed. Cir. 2009),”
`C. The Inequitable Conduct Pleading Standard Under Exergen
`The Federal Circuit in Exergen set forth the pleading standard under Fed. R. Civ. P. 9(b)
`for claims of inequitable conduct:
`In sum, to plead the ‘circumstances’ of inequitable conduct with the
`requisite ‘particularity’ under Rule 9(b), the pleading must identify the
`specific who, what, when, where, and how of
`the material
`misrepresentation or omission committed before the PTO. Moreover,
`although ‘knowledge’ and ‘intent’ may be averred generally, a pleading
`of inequitable conduct under Rule 9(b) must include sufficient
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 8 of 20 Page ID #:2541
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`allegations of underlying facts from which a court may reasonably infer
`that a specific individual (1) knew of the withheld material information
`or of the falsity of the material misrepresentation, and (2) withheld or
`misrepresented this information with a specific intent to deceive the
`PTO.
`Exergen, 575 F.3d at 1328-29.
`III. THERE IS NO PLAUSIBLE PLEADING UNDER EXERGEN THAT THE
`ATTORNEYS PROSECUTING THE ’192 PATENT WERE AWARE OF
`YAMAMOTO, MUCH LESS THAT THEY BELIEVED IT WAS
`MATERIAL AND WITHHELD IT
`A. Garmin’s Proposed Pleading Is Speculation Improperly Couched As
`Fact
`Garmin’s proposed counterclaim is wordy, but ultimately says very little. The
`relevant bases of Garmin’s allegations are boiled down in Paragraphs 123-126 of the
`proposed counterclaim:
`123. The Philips IP&S team prosecuting the U.S. Application knew of
`the Yamamoto reference, and knew that it was material to the
`patentability of the U.S. Application.
`124. The Philips IP&S team operates in a coordinated fashion across its
`offices throughout the world. Philips IP&S prosecuted the EP
`Application, and thus was aware of Yamamoto, was aware of the EPO’s
`rejection of the EP Application based on Yamamoto, and made the
`decision to withdraw the EP Application in view of the Yamamoto
`rejection.
`125. Philips IP&S assigned the same internal docketing number to the
`EP Application and the US Application, such that the Yamamoto
`reference cited in (and used to reject the claims in) the prosecution of
`the EP Application was linked to the US Application. Philips IP&S
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 9 of 20 Page ID #:2542
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`further claimed priority to the EP Application in connection with the
`US Application.
`126. And, importantly, in response to the USPTO’s statement that an
`additional search was required, Philips IP&S selectively disclosed other
`references that were cited against foreign counterparts (such as the prior
`art cited against the Japanese Application) but withheld the Yamamoto
`reference that resulted in the rejection and withdrawal of the EP
`Application.
`As an initial and dispositive matter, Garmin improperly assumes that knowledge of
`patent prosecution should be imputed across the entire Philips Intellectual Property &
`Standards (IP&S) organization, alleging that “Philips IP&S…was aware of Yamamoto”
`and “Philips IP&S…withheld,” etc. While Philips could say a lot about the actual
`functioning and operation of IP&S, Philips need not introduce anything outside of the
`proposed pleadings to show that Garmin’s assumptions are unwarranted.
`As set forth in Paragraph 80 of the proposed counterclaim, Philips IP&S is composed
`of “over 300 intellectual property experts in 18 offices in 11 different countries.”
`According to the Philips IP&S “About” webpage (https://www.ip.philips.com/about) that
`was incorporated into the draft counterclaim at Paragraph 79, “Royal Philips’ total IP
`portfolio currently consists of 64,500 patent rights, 39,000 trademarks, 88,500 design rights
`and 3,200 domain names. Philips filed 1,015 new patents in 2019, with a strong focus on
`the growth areas in Healthtech services and solutions.”
`Thus, as borne out by the pleadings of the proposed counterclaim itself, Philips IP&S
`is a large multi-national organization with hundreds of professionals in dozens of offices
`around the world that files upwards of a thousand patent applications a year. As a starting
`point, then, it already strains plausibility to assume that a given attorney working on a
`patent application in one office would have perfect knowledge of the work of an attorney
`in a different office.
`Garmin tries to tie the work of the Philips IP&S offices together by pointing to the
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`Case 2:19-cv-06301-AB-KS Document 87 Filed 07/31/20 Page 10 of 20 Page ID #:2543
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`fact that similar internal tracking numbers are used for foreign counterpart applications.
`However, this unsurprising and unremarkable fact can hardly support specific plausible
`facts that US patent prosecution attorneys working on dozens or hundreds of patent
`applications per year track every detail of the dozens or hundreds of other patent
`applications that their foreign counterparts are working on across the ocean.
`Ultimately, Garmin’s arguments hinge on two purely speculative conclusions: (1)
`that the attorneys prosecuting the ’192 Patent knew of the Yamamoto reference, and (2)
`that they believed it was material and deliberately withheld it. Although Garmin carefully
`avoids using the phrase “upon information and belief” in its proposed pleadings, Garmin
`in actuality has no factual basis to support the speculative conclusions that it wants the
`Court to entertain. See, e.g., In re Autodesk, Inc. Sec. Litig., 132 F. Supp. 2d 833, 839
`(N.D. Cal. 2000) (“it is irrelevant whether a plaintiff uses the phrase ‘information and
`belief’ when alleging false representations because allegations of misrepresentations not
`made on personal knowledge are presumed to be made on information and belief.”).
`B.
`The Relevant US Attorneys Were Not Involved In The EU Prosecution
`Although Garmin’s proposed pleading identifies five US patent prosecutors – Yan
`Glickber, Kathleen Asher, Patricia Heim, Edward Goodman, and Jeanne Rusciano – as the
`relevant attorneys involved in prosecuting the ’192 Patent application, Garmin nowhere
`alleges that these attorneys had any involvement in prosecuting the European Application
`in which the Yamamoto reference was cited. That is because they were not involved, as is
`apparent from the face of the public records of the prosecution of the patent applications.
`Although Garmin did not include copies of the file histories for the EU and US
`applications for the Court’s review in either its proposed counterclaim or its present
`motion, Philips has included them here as Exhibits 2 and 3, respectively, to the Ciardullo
`Declaration. The Court may properly consider them because they are incorporated by
`reference in the proposed counterclaim and are necessary for assessing the sufficiency of
`the proposed pleading. See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (“in
`order to prevent plaintiffs from surviving a Rule 12(b)(6) motion by deliberately
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`omitting…documents upon which their claims are based, a court may consider a writing
`referenced in a complaint but not explicitly incorporated therein if the complaint relies on
`the document and its authenticity is unquestioned.”); Davis v. Lost Int'l LLC, No. CV 12-
`8002 GAF (MANx), 2013 U.S. Dist. LEXIS 199179, at *8 (C.D. Cal. Apr. 8, 2013) (court
`may take judicial notice of patent file history even if it were not relied on in complaint).
`As a threshold matter, it is notable that correspondence in the EU and US prosecution
`went to two different addresses, with EU office actions being delivered to Philips IP&S in
`The Netherlands, and the US office actions going to Philips IP&S in the US. (See file
`histories, generally.)
`From 2005 to December of 2010, several different European attorneys were involved
`in the prosecution of the European Application. Daniel Damen was listed on the face of
`the International application published Jun 21, 2007.1 The Request for Entry into the
`European Phase on May 13, 2008 listed Marcus Schouten as a representative and A.
`Groenendaal signed the request as “NL, Philips IP&S, A. Groenendaal 908.” NL, Philips
`IP&S refers to the Netherlands Philips IP&S. M. van Velzen, H.J.R. Schmitz, and S.
`Cumpson all signed letters accompanying subsequently filed items on July 15, 2008;
`January 1, 2010; and December 22, 2010 respectively. In each case, the letters were signed
`as “NL, Philips IP&S, [name and number of signor].” Additionally, H.C.P.M. van Iersel
`signed a December 22, 2010 reply to communication from the Examining Division. As
`evidenced by the prosecution file histories, none of these individuals were involved in any
`way in the prosecution of the ’192 Patent in the U.S., nor were they identified in Garmin’s
`proposed counterclaim.
`On December 22, 2010, Daniel Damen requested a transfer of the EU application to
`be in the name of Petronella Verweij as the previous representatives (Schouten and
`Groenendaal) had left NL Philips IP&S. From this point on, all communications from the
`EPO regarding the application were addressed to Ms. Verweij in The Netherlands, and she
`
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`1 The file histories are presented in reverse chronological order. Also, in locating
`documents by date in the EU file history, recall that the European date convention is “Day-
`Month-Year” rather than “Month-Day-Year.”
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`signed all of Philips’s correspondence with the EPO regarding the application. Thus, Ms.
`Verweij was the only Philips representative listed on any documents from the time the
`Yamamoto reference was identified by the EPO (June 30, 2014) to the time the application
`was withdrawn (April 7, 2015). As indicated by the file histories, Ms. Verweij also was
`not involved in any way in the prosecution of the ’192 Patent in the U.S., and Garmin,
`while mentioning her in the proposed counterclaim, has not accused her of any wrongdoing
`or even being involved in the US prosecution handled by US Philips IP&S.
`As is evident from the prosecution file histories, the five US prosecutors specifically
`accused by Garmin of inequitable conduct (Yan Glickber, Kathleen Asher, Patricia Heim,
`Edward Goodman, and Jeanne Rusciano) were never involved in the prosecution of the
`European application and none of their names appear in any of the documents in the
`European application’s file history. Nor does Garmin allege otherwise. There is no
`indication that any of these individuals were ever aware of the Yamamoto reference or its
`disclosure in the European application, much less that they believed it was materiel and
`deliberately withheld the reference from the USPTO.
`C. A Simple Timeline Shows The Disconnect Between Events In The EU
`And The US
`The timeline graphic below is based on the EU and US application file histories. As can
`be seen, the original priority application was filed in 2005, and an International Search Report
`issued in 2007 in the EU case. That International Search Report did not reference Yamamoto,
`but contained other prior art. In 2008, the US application was filed, and the International Search
`Report (without Yamamoto, which would not yet be identified in the EU case for another six
`years) was disclosed to the US Patent Office as part of the initial filing in the US, it having been
`part of the priority claim in 2008. US prosecution then proceeded separately on its own track
`with an entirely different set of attorneys than those that were prosecuting the EU application in
`Europe.
`There was then a “changing of the guard” in the EU in 2010, with the original prosecutors
`departing, and a single patent prosecutor – Ms. Verweij – taking over the case. (See December
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`22, 2010 correspondence.) This change-up undoubtedly would have caused further disconnect
`of the EU case, if there was any at all in the first place. It was not until mid-2014 – six years
`after the filing of the US application – that Yamamoto was cited for the very first time among
`other prior art in the EU prosecution. (See June 30, 2014 correspondence from the European
`Patent Office.) By this point, the US application had already been separately prosecuted for
`many years and was getting close to issuance. The EU prosecuting attorney, Ms. Verweij, never
`commented on Yamamoto. A few months later, she withdrew the EU application. (See April
`7, 2015 Vereiji Letter and Attached Listing of Withdrawn Patent Applications.) That
`withdrawal was a simple expediency, and there is no evidence that it is was done in reaction to
`Yamamoto (which Philips does not believe is invalidating). Indeed, as shown in the EU file
`history – and as a testament to just how many patent applications Philips manages at any given
`time – Ms. Verweij’s withdrawal of a the EU application was part of a pro forma withdrawal of
`28 other applications, among which the particular application at issue here received no special
`attention, and was nothing more than a number on a long laundry list. (Id.) This is suggestive
`on its face that Ms. Verweij herself paid no special attention to this one patent application among
`so many.
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`As is most relevant for the present purposes, Garmin cannot allege any set of facts
`showing that the US prosecuting attorneys ever even knew about the Yamamoto reference,
`much less that the US prosecutors had deemed it to be material and intentionally withheld it.
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`D. The Citation Of The Japanese Reference Does Not Plausibly Suggest
`Knowledge Of Yamamoto
`Garmin observes that the US prosecutors of the ’192 Patent application cited a prior art
`reference – JP 2003-102692A (“’692 Prior Art”) – that other members of the Philips IP&S team
`had successfully overcome in the separate prosecution of a Japanese patent application.
`(Proposed Pleading, ¶¶ 103-106.) From this, Garmin makes the following speculative leap of
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`reasoning: (1) the US prosecutors knew the details of the separate prosecution occurring in Japan
`(as opposed to simply having found the ’692 Prior Art independently on their own), (2) this
`means that the US prosecutors must have been closely monitoring foreign prosecution at all
`relevant times, (3) the US prosecutors therefore must have also been closely monitoring the EU
`application in which Yamamoto was cited, and (4) the US prosecutors must have known about
`the Yamamoto reference when it was cited in June 2014, believed it was material, and decided
`to deliberately withhold it to deceive the US Patent Office. (Id., ¶¶ 119-120.) This tortured
`chain of purely speculative extrapolations is a bridge too far under Exergen.
`IV. THE LAW COMPELS DENIAL OF GARMIN’S MOTION AS FUTILE
`A. Exergen And Its Progeny Are Directly On Point
`The Exergen case itself is remarkably on point to the present facts, and compels
`denial of Garmin’s Motion. The allegation in Exergen was that “Exergen, its agents and/or
`attorneys” were aware of purportedly material prior art from related patent prosecution, but
`failed to disclose it in the subject patent application. 575 F.3d at 1326. However, the
`movant failed to allege that any of the specific attorneys prosecuting the application within
`the Exergen organization as a whole knew of the cited prior art, much less that they would
`have deemed it material and intentionally withheld it. The court explained:
`…the circumstances that SAAT has alleged, even if true, do not
`plausibly suggest any ‘deliberate decision to withhold a known material
`reference’ or to make a knowingly false misrepresentation--a necessary
`predicate for inferring deceptive intent. Molins, 48 F.3d at 1181
`(stating that the evidence ‘must show that the applicant made a
`deliberate decision to withhold a known material reference’). SAAT's
`purported basis for inferring deceptive intent is that Exergen had cited
`the '998 patent when prosecuting the '205 patent but then failed to cite
`it when prosecuting the '685 patent. The mere fact that an applicant
`disclosed a reference during prosecution of one application, but did
`not disclose it during prosecution of a related application, is
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`insufficient to meet the threshold level of deceptive intent required
`to support an allegation of inequitable conduct. Indeed, SAAT's
`pleading does not contain specific factual allegations to show that
`the individual who had previously cited the '998 patent knew of the
`specific information that is alleged to be material to the '685 patent
`and then decided to deliberately withhold it from the relevant
`examiner. In the absence of such allegations, the district court was
`correct not to draw any permissive inference of deceptive intent with
`regard to the '998 patent, lest inequitable conduct devolve into ‘a magic
`incantation to be asserted against every patentee’ and its ‘allegation
`established upon a mere showing that art or information having some
`degree of materiality was not disclosed.’ FMC, 835 F.2d at 1415. See
`Burlington Coat Factory Sec. Litig., 114 F.3d at 1418 (Alito, J.) (‘To
`allow plaintiffs and their attorneys to subject companies to wasteful
`litigation based on the detection of a few negligently made errors found
`subsequent to a drop in stock price would be contrary to the goals of
`Rule 9(b), which include the deterrence of frivolous litigat